Skip to main content

J&K to refund GST to protect tax relief given to factories

By
J&K to refund GST to protect tax relief given to factories
Jammu and Kashmir govt clears plan to reimburse entire state GST and 42% of central GST to manufacturers who enjoyed excise duty relief in the earlier indirect regime  The Jammu and Kashmir government has cleared a plan to reimburse the entire state goods and services tax (SGST) and 42% of central GST (CGST) to manufacturers who had enjoyed excise duty relief in the earlier indirect regime.

Before the introduction of GST from 1 July, manufacturing units in Jammu and Kashmir, Uttarakhand, Himachal Pradesh and North Eastern states enjoyed 10-year excise duty relief either by way of upfront exemption or by way of a refund as the Central government wanted to encourage industrialisation of these states.

After GST’s roll-out, the excise duty was replaced by GST, which has two equal components of CGST and SGST. The central government on 16 August decided to reimburse 58% of the CGST, which it collects from these units as the remaining 42% is anyway transferred to states under the formula recommended by the 14th Finance Commission for sharing of the divisible pool of central government taxes. The Union cabinet earmarked Rs27,413 crore for such refund for the period up to March 2027.

The Jammu and Kashmir government has now decided to reimburse the entire SGST it collects from manufacturing units and 42% of the CGST proceeds it receives from the centre, a person privy to the development said, on the condition of anonymity. Detailed notification on the eligibility of businesses for the refund and its mode of disbursement will be issued shortly, said the person.

Experts welcomed the move but added that other hill states and north eastern states where excise duty exemption was in force should follow suit. “The J&K budgetary support scheme for exempted units is a welcome development but the process of issuing relevant notifications needs to be expedited,” said M.S.Mani, partner-GST, Deloitte India.

Businesses need complete clarity on the treatment of such exemptions in the GST era as it will enable them to plan their operations, pricing, etc., said Mani. Abhishek Jain, tax partner, EY India said the Jammu and Kashmir government’s initiative to refund taxes to eligible businesses in the new regime was laudable. “It would aid in upholding the trust and confidence of companies that had set up units in these regions for tax benefits. Industry would expect and await similar initiatives by other states like Uttarakhand, Himachal Pradesh and North East States,” said Jain.
Under the North East Industrial and Investment Promotion Policy of 2007 and the package for special category states of Jammu and Kashmir, Uttarakhand and Himachal Pradesh, companies that set up factories were granted 10-year relief from excise duty from the date of starting commercial production.
The Mint, New Delhi, 28th October 2017 

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Retail inflation cools to a six-year low of 2.82% in May on moderating food prices

By
  New Delhi: Retail inflation in India cooled to its lowest level in over six years in May, helped by a sharp moderation in food prices, according to provisional government data released Thursday.Consumer Price Index (CPI)-based inflation eased to 2.82% year-on-year, down from 3.16% in April and 4.8% in May last year, data from the Ministry of Statistics and Programme Implementation (MoSPI) showed. This marks the fourth consecutive month of sub-4% inflation, the longest such streak in at least five years.The data comes just days after the Reserve Bank of India’s (RBI) Monetary Policy Committee cut the repo rate by 50 basis points to 5.5%, its third straight cut and a cumulative reduction of 100 basis points since the easing cycle began in February. The move signals a possible pivot from inflation control to supporting growth.Food inflation came in at just 0.99% in May, down from 1.78% in April and a sharp decline from 8.69% a year ago.A Mint poll of 15 economists had projected CPI ...
Post a Comment
Read more